Vivus sees EU regulators rejecting diet drug

JosephWalker

--Vivus sees European delay in getting diet drug approved

--Company cites tough regulatory environment

--Shares slide 10%

(Updates throughout with details and comments from Vivus's president.)

Vivus Inc.
VVUS, -12.72%
said a European drug regulator is unlikely to recommend marketing approval for the obesity drug Qsiva next month, a setback as the company races to sell its diet treatment on the continent.

Peter Tam, president of Vivus, cited a tough regulatory environment in Europe for the decision and declined to speculate on how long Qsiva would be delayed there. After the ruling, which is expected in mid-October, Vivus can appeal the decision or refile the drug's application.

"We await the official decision and the formal report, which should provide us specifics on any additional requirements leading to the approval of Qsiva in Europe," Mr. Tam said. He added that the company learned about the expected decision Wednesday in discussions with the regulator, the European Medicines Agency's Committee for Medicinal Products for Human Use.

Qsiva is the European name for Vivus's drug marketed in the U.S. as Qsymia.

Mr. Tam said it was unclear what specific issues the committee would cite in its decision, but committee members had expressed concerns about the European withdrawal of Abbott Laboratories'
ABT, -0.16%
weight-loss drug Meridia in 2010 and Sanofi S.A's (SAN) obesity drug Acomplia in 2008.

Despite the epidemic of obesity, especially in developed markets like the U.S., diet drugs have faced intense scrutiny because regulators are mindful of the damaging side effects caused by older obesity treatments as well as the fact that the drugs are likely to be taken by millions of people for a long period of time.

Mr. Tam also said European regulators are less comfortable with the use of phentermine, one of Qsiva's two active ingredients, than their American counterparts. Phentermine hasn't been on the European market in more than a decade, he said.

The E.U. regulator's rejection of Qsiva could delay the drug's entry into the European market by at least 12 months, said equity analyst Simon Davison of Edison Investment Research. The delay could mean that Belviq, a competing drug from rival Arena Pharmaceuticals Inc.
ARNA, +1.76%
will be approved first in the E.U.

Vivus shares slid 10% to $21.27, while Arena's stock gained 3.3% to $9.05. Vivus shares have more than doubled over the past year but have lost some gains in recent weeks.

Arena's Belviq was approved first in the U.S. but has yet to reach the market because it had to go through a classification review with the Drug Enforcement Administration. The review, which lasts up to six months, is given to drugs with a likelihood or potential of being abused.

Vivus's Qsymia was made available to U.S. consumers this week after U.S. Food and Drug Administration approval in July, a month after Arena. Qsymia didn't have to undergo the DEA process because Qsymia has been classified as a non-narcotic drug by the agency based on a prior scheduling for one of its two generic components.

Qsymia--previously known as Qnexa--is a controlled-release formulation that combines low doses of two older generic drugs: the stimulant phentermine, which cuts appetite, and topiramate, which increases the sense of feeling full. Topiramate is also sold under the brand name Topamax by Johnson & Johnson
JNJ, +0.37%
to treat migraines and seizures.

Phentermine was part of the fen-phen obesity drug that was taken off the market in the 1990s because of links to heart-valve damage. Evidence now indicates the increased risk for heart problems was attributable to fenfluramine and not to phentermine.

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